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Markets for Groundfish in California, Part 1 of 4

This is part 1 of a 4-part series intended to invite conversations in advance of our planned end market demand analysis for groundfish in California. The larger goal is to provide quantified end market data to inform profitable value chain investments that will positively impact harvesters, local communities and the ocean.

Why end market data matters

Wilderness Markets recently completed our overview of the U.S. West Coast Groundfish fishery, which focuses on the IFQ fishery in California. One of the constraints we identified is that for except in the few instances where fish is sold directly to the end consumer, harvesters have very little idea of the final sales price of their fish, and they don’t know who ultimately consumes their fish, why, in what form, or in what volumes. In fact, the entire value chain gets fairly opaque after the harvester, with limited transparency at the end market regarding the amount and value of fish sold in the U.S.

Without knowledge of the potential returns, how can investors make targeted, smart value chain investments that can improve returns to the harvesters, the local communities, and the ocean as well as realize a profit?

In this series, we present some of the numbers we’ve gathered for groundfish pricing, exports and imports from California along with the potential value chains within fishery. Our purpose is to invite discussion. We want to know what you think. Are these numbers reliable? What do you think is affecting this market? What happens to the waste products from the processors and fishermen’s discards in your area?

We envision that this our findings will be further informed by the upcoming market research for California groundfish that we’re in the process of commissioning.

What makes this fishery special?

Unlike many of the fisheries we’ve reviewed, the West Coast groundfish fishery in California is a management success, which is great news, especially considering the fishery was declared an economic disaster in 2000. Thirteen species were MSC certified in 2014, eight groundfish in the California Groundfish Collective fishery are  green-rated by Seafood Watch plus more that are green- or yellow-rated.

Because of these positive indicators of rebound, and because of the ongoing good governance and management, we expected the groundfish in this market to be sought after—we expected there would be an abundance of demand and pricing to reflect the demand and certification. But that isn’t what we heard from the harvesters, fishing groups, and buyers.

Despite this significant ecological progress, fishing and conservation communities continue to share concern about long-term economic sustainability, particularly as the harvesters shoulder management costs that have increased over the past five years. Our assessment identified a number of operational inefficiencies in the value chain that are hurdles to increasing the market value of seafood from this fishery, including lack of quantified end market data.

Knowing what characteristics increase the value of the fish in different markets would allow harvesters to focus their efforts and increase their profitability.